Nestlé Colombia under scrutiny

Published:
15. 07. 2011

Alliance Sud and Nestlé have been engaged in a high-level dialogue on Colombia between 2006 and 2011. Alliance Sud examined the behaviour of the multinational and the accusations being levelled at it by local trade unions. Two years later it evaluated the implementation of its recommendations. The dialogue led to concrete improvements, yet the deep conflict with the trade unions persists.

At the end of October 2005, the watchdog organisation Multiwatch – to which Alliance Sud and some of its members belong – put Nestlé «on trial» in Berne. The group's headquarters in Vevey tried unsuccessfully to impede it. Yet its interventions to the directors of Caritas and Swiss Catholic Lenten Fund lead to a years-long dialogue process with Alliance Sud.

The talks began in the spring of 2006. Both sides agreed on confidentiality so as to ensure open information and to prevent the exploitation of the dialogue for PR or campaign purposes. Besides, it was not to be an abstract discussion about corporate responsibility but one based on the concrete case of Colombia. For Alliance Sud, the aim of that process was to help generate greater respect for human and trade union rights on the part of Nestlé and improve living and working conditions in Colombia. In April 2008, Alliance Sud undertook an initial fact-finding mission at its own expense.

Difficult environment

The Colombian context in which Nestlé operates is a complex and difficult one. Some 150 years of violence and (sometimes armed) conflict have spawned distrust, insecurity and grave human rights abuses. There is absolutely no culture of dialogue. All this is impacting the relationship between Nestlé and its most important trade union, Sinaltrainal. Their relations are plagued by a painful memory and traumatic experiences such as the liquidation of the Cicolac factory in Valledupar (2003), leading to the dissolution of the local trade union section.

The relationship has been further aggravated by threats and violent attacks on trade unionists and on members of the company management. Since 1986, 13 active or former Nestlé employees have been killed, most of them Sinaltrainal leaders. With one exception, the Colombian judicial authorities have so far neither identified the perpetrators nor elucidated their motives. The trade union is convinced that there was – at least indirect – complicity on the part of Nestlé. Nestlé categorically rejects these accusations. Our delegation did not collect any information attesting to complicity between Nestlé and the paramilitaries in relation to the murders of trade unionists or threats against them.

2008 fact-finding mission: minus and plus points

The delegation formed a mixed impression during its 2008 trip. Nestlé's behaviour was not as bad as the trade unions maintained, but also not as good as Nestlé made out. To Nestlé’s credit, it had invested in worker education and health, water management and rural development. Nestlé's wages are 2.5 to 3.5 times higher than the legal minimum wage, besides which there are other social benefits. The level of unionisation is a considerable 65 per cent (national average 4.6 per cent). Moreover, Nestlé grants significant collective benefits to the trade unions. But we also identified some problems. Nestlé Colombia for instance has a dual wage system whereby those employed after 2004 are being paid 30 per cent less in wages. Sinaltrainal accuses the company of hostility towards trade unions in the form of intimidation, repressive dismissals and unwillingness to engage in dialogue. Nestlé was hiring an increasing number of temporary workers and subcontractors, whose working conditions were miserable. Nestlé is poorly integrated into the local communities. Besides, we diagnosed insufficient conflict sensitivity, in that the company showed scant concern about dealing with the past and its public reaction to attacks on trade unions was insufficient. Its approach to problems was technocratic, paternalistic and profit-driven.

2010: Nestlé implements recommendations

After the first mission Alliance Sud formulated some 40 recommendations. Nestlé accepted a good half of them, including some important ones. In June 2010 the delegation returned to Colombia to evaluate their implementation. Nestlé seemed more open and self-critical and had systematically implemented the recommendations it had accepted. It was taking steps to deal with the past: it had opened two reconciliation centres and launched the collective writing of a book on the company history in Bugalagrande. It had expanded dialogue with the trade unions, improved the position of minority trade unions and invited Sinaltrainal to explain the collective labour agreements to new employees on a trial basis. It began to publicly condemn anti-trade union attacks. It had reduced the number of temporary workers and subcontractors and was striving to do more for the local population.

Most of our dialogue partners (authorities, NGOs, etc.) acknowledged these advances. As far as Sinaltrainal was concerned, however, nothing had changed, and the problems were still unresolved. Yes, there was more dialogue, but it was not leading to concrete improvements. Yes, Nestlé was doing more in favour of employees and the population, but only to isolate the trade unions.

Dialogue of the deaf

There is still abysmal distrust between Nestlé and Sinaltrainal. The trade union interprets the problems in policy terms, as part of a worldwide corporate strategy. Nestlé regards the problems as shortcomings that can be remedied with practical measures. Sinaltrainal denounces the gap between Nestlé's words and its deeds. Nestlé denounces the dual strategy of the trade union, whereby locally it is pragmatic and solution-oriented, whilst nationally and internationally it is radical and ideological. Conflicts between trade unions and company are normal. Between Nestlé and Sinaltrainal, however, they have taken on dimensions that are counterproductive for all concerned.

After the second mission Alliance Sud formulated some suggestions as to how both parties could find their way out of the impasse. We do not pretend to have the solution, but a mediation by a third party seems inevitable to us in order to create a minimum of trust. This implies a more participatory and inclusive approach on the part of Nestlé, and a less aggressive tone and better substantiation of accusations on the part of Sinaltrainal.

Nestlé has accepted most of the new recommendations. It rejects those which it believes might weaken its competitiveness. Nestlé Colombia has declared that it wants to become a model for corporate social responsibility. The country manager in place since January 2010 has nevertheless stated that he wants to massively increase profitability and double turnover. It remains to be seen whether Nestlé will succeed in combining these ambitious economic targets with stronger social commitment.

Nestlé Colombia

Nestlé has been operating in Colombia since 1944. It owns five factories, one of which (DPA in the Valledupar) is a joint venture. It employs 2,500 persons directly and 1,800 indirectly as subcontractors. Nestlé works with some 9,000 suppliers and over 2,500 cattle farmers. Some 90 per cent of what is sold in the country is produced locally. About 80 per cent of the raw materials processed originate in Colombia. It is the leading purchaser of Colombian coffee (13 per cent of the harvest) and the fifth largest purchaser of milk.